Avoiding Cash Discounts on Credit Notes in Dynamics 365 for Operations

Posted on: March 15, 2017 | By: Jarrod Kraemer | Microsoft Dynamics AX/365

Authored by: Rosey McAdams

Most Dynamics 365 users are well aware of the cash discount functionality and have several cash discounts setup for their company.  However, a mistake can be made in cash discount setup that can cause under charging customers and underpaying vendors and quite a bit of manual work to alleviate the problem.  The problem that I am referring to, which is caused by simply not checking one AR/AP parameter box, is cash discounts being taken on credit notes both to customers and from vendors. 

The way Dynamics 365 is setup out of the box, a cash discount will be automatically applied to credit notes that are settled to a customer or vendor balance before the cash discount terms period.  If a certain parameter in Dynamics 365 is not changed from what it is set to at time of AX installation this problem will continue to happen, and potentially customer and vendor balances could become incorrect very quickly.

The solution to this issue is quite simple.  There is a parameter on both AP and AR parameters setup forms on the settlements tab called “Calculate Cash Discounts for Credit Notes”, as I mentioned above this parameter is set to yes out of the box, so it is quite common for customers to forget to switch this parameter.  To stop having cash discounts calculated on credit notes you simply must switch this parameter from yes to no.



When this parameter is changed, a cash discount will now never be calculated on a credit memo, whether it be entered through a GL or an AP journal, a free text invoice, or a sales or purchase order.  Just remember this flag needs to be switched in every legal entity in both AP and AR parameters to work on both the vendor side and customer side for all of your companies!

Hopefully this is a helpful hint to fix what could be an annoying problem for your company! For additional information or help with any cash discount issues please feel free to reach out to us at info@loganconsulting.com or (312) 345-8817. 

All the best! 
Logan Consulting 

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